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PRSIX is where I’d like to be someday when I’m too old to know which end is up - or much less care. One of T. Rowe’s strengths is their intelligent macro-reads and ability to steer funds like that in the right direction. Of course, they have a lot of good funds to start with. (Currently, I’m only 7-8% allocated to it.)
My take (a bit overstated) on TMSRX: a Rube Goldberg concoction, consisting of 5 different managers each pulling in a slightly different direction with the expectation that at least 1 or 2 of them will get it right at any particular time. Because it can short stocks or bonds, expenses run high. Difficult trick to pull off. They’ve done a great job keeping it above water. It’s nice to own because it will dampen down your overall volatility by moving differently than the stock / bond markets quite frequently. Don’t expect to make a lot with it. (It’s about 18% of my holdings.)
Of the two I mentioned, TMSRX is probably “less risky” in that it shouldn’t fall as far in a bad market. But PRSIX is pretty tame and should generate at least a couple more percentage points on the upside over 5-10 year stretches.
BTW - A very close fund to PRSIX is TRRIX. My take is that the former is slightly more aggressively positioned.
This s a great thread with a lot of good analysis. Thanks for the replies to my post. Wanted to circle back on my comment re: MGGPX vs. PRGSX. After reviewing it further... I think one big reason I selected MG over PRG was the turnover. T Rowe’s turnover is 112% vs Morgan’s 22%. Perhaps I’m missing other criteria. But that was a big one when I first bought.
DODLX and DODBX are both available, although, like Vanguard funds, Fidelity spitefully charges a $75 transaction fee. Vanguard only charges a $20 tf for purchases of Fidelity and Dodge & Cox funds.
Not sure if it's been mentioned yet but if you didn't know, MGGPX and its other share classes soft-closed back in December. (I got in on the last day, as I did w/PRWCX and have been very happy since.)
@hank : PRSIX appears to be holding close to 13.5 % cash at this time. Is this a (normal) % for cash or are they building some dry powder ? Just wondering , Derf
@hank : PRSIX appears to be holding close to 13.5 % cash at this time. Is this a (normal) % for cash or are they building some dry powder ? Just wondering , Derf
@Derf - It may be a bit of an illusion. Lipper puts the stock holdings today at 40%, which is the fund’s target equity allocation. More likely, the cash buildup represents a retrenchment from bonds into cash / shorter duration securities. No doubt, however, they’ve also moved away from equities to a lesser extent (from a slightly overweight position).
Curiously, above March update puts “cash benchmarked” at 23%. Some of the 23% reflects cash underlying futures positions . I’d take that 23% number with a large grain of salt. Especially since It appears the linked March 31 report was intended for professionals and not ndividual investors. Stated cash gets “funky” sometimes when funds engage in derivatives, short sales, futures trading, etc. (all a bit beyond my comprehension).
Lipper puts cash now at 14%. And M* has it at 13.5%. T. Rowe’s own investor website lists cash as 10.8%.
Note: Money managers and individuals generally have shifted from longer duration bonds into shorter duration bonds, and cash / cash alternatives over the past 3 months. So the cash build for PRSIX likely reflects a similar move by PRSIX’s managers.
*** I’m still puzzled by that high “benchmarked cash”. Wondering if it might reference the cash held by the fund’s benchmark index)? I can’t imagine one of their conservative allocation funds getting that high. TRRIX, by comparison, has virtually no cash, preferring to use intermediate / short duration TIPS in that spot.
As a retired and somewhat conservative investor, I am also "mixing and matching to have a consistent performance over time" by using the following funds in my portfolio which M* classifies as "Low" or "Below Average" risk:
ARBIX, NVHAX, VWINX, JHQAX, RCTIX, and TSIIX
Good luck,
Fred
Hi @fred495, Mac from old M* days here. I've been following RCTIX for a while and am just about at the point of putting some $ in it. I'm curious what you think of the asset mix, the volatility, the day-to-day performance (fairly steady or not?) etc.
It looks reasonable to me from the outside, another good mostly securitized credit option, but it'd be good to hear your perspective. How has it met (or not) your expectations?
So far, RCTIX has met my expectations with a successful and steady risk adjusted performance, especially in this rather difficult interest rate environment. It has a solid asset management firm behind it with a manager who has run the fund for over 6 years. The ER is also quite reasonable.
I recently sold my shares in JASSX because of a bungled reorganization, at least that was my perception, and added the proceeds to my existing shares in RCTIX. The fund now makes up about 20% of my portfolio. My only other non-muni bond fund in my portfolio is TSIIX.
Circling back to this... given what was said about HY bonds and inflation / recession related to the worry with FMSDX ... if you were trying to decide between adding more to FMSDX or FBALX right now... which would you prefer?
Circling back to this... given what was said about HY bonds and inflation / recession related to the worry with FMSDX ... if you were trying to decide between adding more to FMSDX or FBALX right now... which would you prefer?
@JonGaltIII FBALX is the larger, more traditional fund. It has a MFO Risk of 4 with a 5 year maximum drawdown of -14.6 compared to MFO Risk of 3 for FMSDX with a maximum drawdown of -10.9. FBALX has 70% equity with a P/E of 36.4 compared to 52% equity with a P/E of 27.4. FBALX has twice the amount in Technology as FMSDX while FMSDX is more value oriented.
I believe that high valuations have pulled returns forward and increased risks boosting the returns of FBALX. For these reasons, I favor FMSDX going forward in the intermediate term as a conservative investor.
My next article on MFO discusses some of these reasons. Thank you for the great question.
@lynnbolin2021 .... thank you for a great response. I was studying MFO premium and considered a few of the items you mentioned but missed some really good points you made. Very helpful.
Thanks for that last post. Brought this thread back up to top and reminded me how good it is. Buying some more FMSDX tomorrow in fact. MGGPX has been doing great too.
With due respect. I found this way too much information to be useful. Need to simplify life.
Hi @VintageFreak Some people like details and others don't. I break out the articles so that Readers may skip sections. There is usually one section that is a summary section without the details.
My next article on MFO is "One Stop Shop Mutual Fund Options With Good Multi-Year Metrics" and you can skip to Section #6 to see 8 funds with good long term performance.
Thanks for that last post. Brought this thread back up to top and reminded me how good it is. Buying some more FMSDX tomorrow in fact. MGGPX has been doing great too.
Thanks for reading and commenting @JonGaltIII. I will look into MGGPX more closely this weekend.
Thanks Charles. I think I'm over analyzing my Int'l or World Funds. I own MGGPX as my primary having exited OAKIX (which, of course, is now doing great YTD) and have been watching PRGSX and BGAFX closely. In general, I keep going back and forth between PRGSX and MGGPX as to which is better and like the ER of the former. Performance-wise and utilizing MFO Premium ... it's a tough choice. I may just end up splitting and investing in both as my World/Int'l fund exposure. Appreciate any thoughts on it. Thanks again.
LCB PRBLX's oft-forgotten sister, LCV PARWX is NTF at Fido and the leader of the LCV pack of NTF and/or TF funds over most periods. Have owned the latter since late 2020/early 2021.
@stillers - good share! Thanks! I had PRILX on my watch but did not have PARWX - rated #1 M* over all periods. Looks like a very solid LC fund. I've got MSEGX and FDGRX (not value I know) for now but will watch this one more closely.
VALUE vs. GROWTH: Circling back to this and @stillers mention of PARWX ... My MSEGX (LCG) is down 1.30% YTD and PARWX (LCV) is up 24.65% - YIKES! A quick comparison scan of Fidelity Growth vs. Value Index funds shows the same . . . a massive move from growth to value this year. The shift to value has been mentioned a bunch but when it's staring you in the face... it becomes even more real. On the bright side FMSDX has been a nice addition.
FMSDX- A Flexible Fund for Income-Hungry Investors via Barrons
“ The challenge with such a flexible strategy is having the analytical skills to cover such a diverse mix of securities. Luckily, Kramer has a deep bench supporting him. “We have $122 billion of assets under management in this [High Income and Alternatives] group,” he says. Of the group’s 62 investment professionals, 35 of them are in research, he adds. Kramer has two co-managers on Multi-Asset Income: Ford O’Neil, who also works with Kramer on the bond-focused Fidelity Strategic Income (FADMX), and Ramona Persaud, who runs the dividend-stock-focused Fidelity Equity-Income (FEQIX).”
“ But he prefers being “agnostic” as to investment style and asset class, finding the undiscovered value in any kind of security.”
@lynnbolin2021, thank you for your articles. I too have been reducing risk and using more asset allocation funds including FMSDX. Just want to simply life. Your research helped considerably to narrow down the vast choices available.
Note that the bond portion of FMSDX has a longer duration of 8.3 years than many intermediate term bonds, in the range of 5-6 years. This fund holds several bond sectors ranging from treasury to EM debts. Rate hike may impact this fund more than those funds with shorter duration.
@Mark, Thanks for the Jim Sloan's articles. We invested in FMSDX in our tax-deferred accounts several years ago. It appeared that I bonds cannot be purchased through brokerages and they can purchase only through TreasuryDirect site and the tax refund. I checked my brokerages and only treasury (not I bonds) can be purchased directly.
With that said, we are inclined to use them in our taxable account, but we are unsure how I bond being used in future retirement. So there is much learning to be done.
I think that the main point of his article was a 'safe' +5% return on one's investment in the near term. I realize that it probably does not work for everyone. Also, $30K might be considered a bit small for a certain percentage of market participants but I would guess that it might be a stretch for a larger population.
No worry @Mark. I appreciate your suggestion on I bond. With low interest rate and higher inflation, there are limited viable choices for income investors.
In one of the TRP interview with Sebastian Page who stated future allocation may need to adjust upward with higher equity allocation since bonds yield too little for retirees. Something like 70/30 or even 80/20 instead of the traditional 60/40 or 50/50.
Comments
PRSIX is where I’d like to be someday when I’m too old to know which end is up - or much less care. One of T. Rowe’s strengths is their intelligent macro-reads and ability to steer funds like that in the right direction. Of course, they have a lot of good funds to start with. (Currently, I’m only 7-8% allocated to it.)
My take (a bit overstated) on TMSRX: a Rube Goldberg concoction, consisting of 5 different managers each pulling in a slightly different direction with the expectation that at least 1 or 2 of them will get it right at any particular time. Because it can short stocks or bonds, expenses run high. Difficult trick to pull off. They’ve done a great job keeping it above water. It’s nice to own because it will dampen down your overall volatility by moving differently than the stock / bond markets quite frequently. Don’t expect to make a lot with it. (It’s about 18% of my holdings.)
Of the two I mentioned, TMSRX is probably “less risky” in that it shouldn’t fall as far in a bad market. But PRSIX is pretty tame and should generate at least a couple more percentage points on the upside over 5-10 year stretches.
BTW - A very close fund to PRSIX is TRRIX. My take is that the former is slightly more aggressively positioned.
Not sure if it's been mentioned yet but if you didn't know, MGGPX and its other share classes soft-closed back in December. (I got in on the last day, as I did w/PRWCX and have been very happy since.)
Just wondering , Derf
Here’s what I’ve been able to dig up .....
From T. Rowe’s website on (April 14) https://www.troweprice.com/personal-investing/tools/fund-research/PRSIX / Click on “Portfolio” option at top.
Domestic Bond 26.90%
Domestic Stock 26.40%
Foreign Bonds 16.10%
Foreign Stock 13.40%
Cash 10.80%
Other 5.80%
Convertibles 0.50%
Preferred Stock 0.10%
Here’s the fund’s Semi-Annual Report from November 2020. Reserves are listed at 10%. Contains a foot-note stating that reserves include the “cash underlying futures positions such as the Russell 2000 futures” https://www.troweprice.com/literature/public/country/us/language/en/literature-type/semi-annual-report/sub-type/mf?productCode=PSI¤cy
Here’s its published March 31, 2021 update . https://www.troweprice.com/literature/public/country/us/language/en/literature-type/portfolio-update/sub-type/portfolio-update?productCode=PSI¤cy=USD
Curiously, above March update puts “cash benchmarked” at 23%. Some of the 23% reflects cash underlying futures positions . I’d take that 23% number with a large grain of salt. Especially since It appears the linked March 31 report was intended for professionals and not ndividual investors. Stated cash gets “funky” sometimes when funds engage in derivatives, short sales, futures trading, etc. (all a bit beyond my comprehension).
Lipper puts cash now at 14%. And M* has it at 13.5%. T. Rowe’s own investor website lists cash as 10.8%.
Note: Money managers and individuals generally have shifted from longer duration bonds into shorter duration bonds, and cash / cash alternatives over the past 3 months. So the cash build for PRSIX likely reflects a similar move by PRSIX’s managers.
*** I’m still puzzled by that high “benchmarked cash”. Wondering if it might reference the cash held by the fund’s benchmark index)? I can’t imagine one of their conservative allocation funds getting that high. TRRIX, by comparison, has virtually no cash, preferring to use intermediate / short duration TIPS in that spot.
It looks reasonable to me from the outside, another good mostly securitized credit option, but it'd be good to hear your perspective. How has it met (or not) your expectations?
Thanks, AJ
So far, RCTIX has met my expectations with a successful and steady risk adjusted performance, especially in this rather difficult interest rate environment. It has a solid asset management firm behind it with a manager who has run the fund for over 6 years. The ER is also quite reasonable.
I recently sold my shares in JASSX because of a bungled reorganization, at least that was my perception, and added the proceeds to my existing shares in RCTIX. The fund now makes up about 20% of my portfolio. My only other non-muni bond fund in my portfolio is TSIIX.
Good luck,
Fred
I believe that high valuations have pulled returns forward and increased risks boosting the returns of FBALX. For these reasons, I favor FMSDX going forward in the intermediate term as a conservative investor.
My next article on MFO discusses some of these reasons. Thank you for the great question.
My next article on MFO is "One Stop Shop Mutual Fund Options With Good Multi-Year Metrics" and you can skip to Section #6 to see 8 funds with good long term performance.
Thanks for reading and commenting.
FMSDX- A Flexible Fund for Income-Hungry Investors via Barrons
“ The challenge with such a flexible strategy is having the analytical skills to cover such a diverse mix of securities. Luckily, Kramer has a deep bench supporting him. “We have $122 billion of assets under management in this [High Income and Alternatives] group,” he says. Of the group’s 62 investment professionals, 35 of them are in research, he adds. Kramer has two co-managers on Multi-Asset Income: Ford O’Neil, who also works with Kramer on the bond-focused Fidelity Strategic Income (FADMX), and Ramona Persaud, who runs the dividend-stock-focused Fidelity Equity-Income (FEQIX).”
“ But he prefers being “agnostic” as to investment style and asset class, finding the undiscovered value in any kind of security.”
Seems to be working just fine.
Note that the bond portion of FMSDX has a longer duration of 8.3 years than many intermediate term bonds, in the range of 5-6 years. This fund holds several bond sectors ranging from treasury to EM debts. Rate hike may impact this fund more than those funds with shorter duration.
The I Bond Yield Just Hit 5.33% And Beats All Other Safe Assets; Buy Before November 1
With that said, we are inclined to use them in our taxable account, but we are unsure how I bond being used in future retirement. So there is much learning to be done.
In one of the TRP interview with Sebastian Page who stated future allocation may need to adjust upward with higher equity allocation since bonds yield too little for retirees. Something like 70/30 or even 80/20 instead of the traditional 60/40 or 50/50.